Core-Mark Holding (CORE) Tops Q4 EPS by 11c, Revenues Beat; Offers FY21 EPS/Revenues Guidance Above Consensus
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Core-Mark Holding (NASDAQ: CORE) reported Q4 EPS of $0.42, $0.11 better than the analyst estimate of $0.31. Revenue for the quarter came in at $4.3 billion versus the consensus estimate of $4.16 billion.
Fourth Quarter 2020 Key Metrics
- Net Sales increased 2.3% to $4.3 Billion
- Net Income increased 17.3% to $19.0 Million
- Adjusted EBITDA (Non-GAAP)(1) increased 14.1% to $55.1 Million
“2020 truly demonstrated the Company’s resilience as we delivered record levels of sales and earnings by taking decisive actions to manage costs while continuing to execute on our strategic priorities. Our success this year wouldn’t have been attainable without the incredible commitment from our Core-Mark family, our customers and vendors,” said Scott E. McPherson, President and Chief Executive Officer. “Our fourth quarter and full year outperformance demonstrates our momentum heading into 2021 as reflected by our guidance and outlook on capital allocation.”
Mr. McPherson continued, “As we enter 2021 with a strong balance sheet and a growing business, our board has carefully mapped out our three-year capital allocation priorities. First, we will continue to reinvest in our business through a disciplined approach to maintenance and growth capital. We will return value to our shareholders through a three-year shareholder return plan focused on more aggressive share buy-backs and continued growth in our dividend. Within our balanced approach to capital allocation, we have been careful to leave sufficient availability to pursue meaningful acquisition opportunities while remaining within our target leverage threshold. To summarize, I am confident in the momentum of the Company and the steps we are taking to enhance value for our shareholders.”
Core-Mark Holding sees FY2021 EPS of $1.90-$2.06, versus the consensus of $1.88. Core-Mark Holding sees FY2021 revenue of $17.2-17.5 billion, versus the consensus of $17.14 billion.
- Net Sales expected to be between $17.2 Billion and $17.5 Billion
- Adjusted EBITDA (Non-GAAP)(1) expected to be between $208 Million and $218 Million
- Board approves a new 3-year, $375 million shareholder return plan
The Company expects 2021 net sales to be between $17.2 billion and $17.5 billion. Adjusted EBITDA is expected to be between $208 million and $218 million. The 2021 Adjusted EBITDA guidance assumes our operating expense run-rate will benefit from cost savings initiatives and operational efficiency gains realized in 2020, partially offset by the return of certain costs including 401(k) matching, travel and meetings expense and health and welfare expenses.
This guidance assumes $28 million in cigarette inventory holding gains and does not include any other significant holding gains. Cigarette inventory holding gains of $31.8 million in 2020 exceeded our 2020 guidance of $26 to $27 million due largely to an unprecedented fourth manufacturer price increase by Reynolds American Inc. that is not anticipated to repeat itself in 2021.
Diluted EPS for the full year is expected to be between $1.39 and $1.54. Diluted EPS, excluding LIFO expense, is expected to be between $1.90 and $2.06. Key assumptions in the guidance include $32.0 million of LIFO expense, a 26.5% tax rate and 45.4 million fully diluted shares outstanding. The Company’s guidance assumes no new acquisitions or large customer market share gains. Capital expenditures for 2021 are expected to be approximately $45 million, which will be utilized primarily for maintenance and technology initiatives as well as upgrades to certain distribution facilities and the relocation of one distribution facility. The Company expects to generate free cash flow in 2021 of $80 to $100 million.
For earnings history and earnings-related data on Core-Mark Holding (CORE) click here.
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